Jim Lentini: More info about health-care reform

As reported in previous columns about the health-care bill signed into law March 23, this information comes from the Foundation for Health Care Education and its reading and evaluation of the new health care reform.

This section refers to the key provisions that take effect immediately, and comes from the Senate bill as amended by the reconciliation bill from the office of Nancy Pelosi on April 2.

For small businesses, the law offers tax credits of up to 35 percent of the employer's premium contributions for those small businesses that choose to offer coverage. This is effective beginning for calendar year 2010. (Beginning in 2014, it offers credits of up to 50 percent of employer premium contributions, for up to two years.)

For seniors

* It begins to close the Medicare Part D donut hole, and provides a $250 rebate to Medicare beneficiaries who hit the doughnut hole in 2010.

Then the bill provides a 50 percent discount on prescription drugs in the doughnut hole, effective on Jan. 1, 2011. (It also completely closes the donut hole by 2020.)

* Help for early retirees creates a temporary re-insurance program (until the exchanges are available) for employer health plans providing coverage for early retirees, helping to protect coverage while reducing premiums for employers and these early retirees age 55-64. (Effective 90 days after enactment.)

For the privately insured

* No discrimination against children with pre-existing conditions: Prohibits all employer plans, and new plans in the individual market, from denying coverage to children with pre-existing conditions. (Effective six months after enactment. Beginning in 2014, this prohibition would apply to adults as well.)

* No rescissions: Bans all health plans from dropping people from coverage when they get sick, effective six months after enactment.

* No lifetime limits on coverage: Prohibits all health plans from placing lifetime caps on coverage, effective six months after enactment.

* Tightly regulates annual limits on coverage: Restricts the use of annual limits by all employer plans and new plans in the individual market, to ensure access to needed care. Effective six months after enactment. (Beginning in 2014, the use of any annual limits would be prohibited for these same plans.)

* Free preventive care under new plans: Requires new private plans to cover preventive services with no co-payments and with preventive services being exempt from deductibles. Effective six months after enactment.

* New independent appeals process for new plans: Ensures consumers in new plans have access to an effective internal and external appeals process to appeal decisions. Effective six months after enactment.

* More for your premium dollar: Requires all health plans to put more of your premiums into your care, and less into profits, CEO pay, etc.

This medical loss ratio requires plans in the individual market to spend 80 percent of premiums on medical services, and plans in the large group market to spend 85 percent.

Insurers that don't meet these thresholds must provide rebates to policyholders. Effective on Jan. 1, 2011.

* No discrimination based on salary: Prohibits new employer health plans from establishing any eligibility rules for health care coverage that have the effect of discriminating in favor of higher wage employees. Effective six months after enactment.

For the uninsured

* Immediate help for the uninsured with pre-existing conditions (interim high-risk pool): Provides immediate access to insurance for Americans who are uninsured because of a pre-existing condition, through a temporary high-risk pool, until the exchanges are up and running in 2014. Effective 90 days after enactment.

* Extending coverage for young people up to 26th birthday through parents' insurance: Requires plans to allow young people up to their 26th birthday to remain on their parents' insurance policy, at the parents' choice.

Effective six months after enactment, it applies to all plans. However, between now and 2014, for existing employer plans it applies only to young people not offered their own employer-provided coverage.

There are more details, but that will have to wait for future columns. Based on what is highlighted above, it is my opinion that to provide this type of program, its structure of benefits as outlined, the costs will be astronomical and will far exceed what is projected by the authors.

If you missed the column in The Signal last week by columnist Deroy Murdock ("Barely on runway, Obamacare poised to crash," May 1), about the costs of Obamacare, I will have highlights next week.

Jim Lentini, CLU, ChFC, IAR is president of Lentini Insurance & Investments Inc. His column reflects his own views and not necessarily those of The Signal.